How will the interest rate cut effect my mortgage?

4.2 million base rate tracker mortgage holders will be rejoicing in the Bank of England base rate cut today not everyone will be as happy, over fifty percent of homeowners are locked into a fixed mortgage deal and will not benefit from the cuts at all.

Anyone that took a fixed rate mortgage deal out around August 2008 would probably be kicking themselves due to being fixed into rate of around 6.4 percent.

However not all lenders passed on the Bank of England base rate cut in December in-fact almost three quarters of lender failed to pass on the full rate cut, and it is unlikely that many lenders will pass on the full cut this time, although Lloyds TSB, HSBC and Nationwide have all vowed today to pass on the full interest rate cut to mortgage borrowers linked to their Standard Variable Rate (SVR) products.

An average payment on a tracker loan of £150,000 is about £375 a month lower than October 2008, and from the first of January they had another £62.50 wiped off their monthly mortgage payments, the tracker mortgage holders are the real winners in the rate cuts.

Although Nationwide will pass on the full rate cut to its Standard Variable rate, the building society has refused to cut the interest rate on its tracker mortgage products.

If you are waiting to get a good footing on the property ladder this is not necessary a golden opportunity, unless you have around 40 percent deposit to play with, you will see better mortgage rates but they will only be available if you fit the lenders criteria exactly.

Source: Timesonline Speed film The Care Bears Movie release